HCA Midwest Health, which owns eight hospitals in the Kansas City area, will move its headquarters from Kansas City to Overland Park after receiving an undisclosed tax incentive package from the state of Kansas.
The move was announced Wednesday by the Kansas Department of Commerce, which said the hospital chain plans to invest $10.8 million in its new headquarters at I-435 and Nall Avenue.
Kevin Doel, a spokesman for the agency, said via email that the contracts for the incentives aren’t finalized and the department can not release information until they are. That usually takes at least 90 days, he said.
Former Gov. Sam Brownback has said Kansas and Missouri should work to end the economic development “Border War” that allows companies to hop from state to state in search of better tax deals.
Critics say such deals drain the region’s tax base while offering no net job growth.
The HCA Midwest deal is the first border battle deal announced by Brownback’s successor, Gov. Jeff Colyer.
Colyer, who works at one of the HCA Midwest hospitals, hailed the move in a prepared statement.
“It is great news when successful companies such as HCA Midwest Health consider all of their options and choose to relocate to the great state of Kansas,” said Colyer, a plastic surgeon. “We are excited to be able to be a part of their story and look forward to their continued success.”
HCA Midwest owns Menorah Medical Center in Overland Park, Overland Park Regional Medical Center, Belton Regional Medical Center, Centerpoint Regional Medical Center in Independence, Lafayette Regional Medical Center in Lexington, Lee’s Summit Medical Center, and Research Medical Center and Research Psychiatric Hospital, which are both in Kansas City.
Colyer is the associate clinical director of the Grossman Burn Center at Research Medical Center in Kansas City. Ben Miller, a spokesman for the burn center, said it’s a paid position Colyer has held since last month. A financial disclosure form Colyer filed last year also listed him as a director of Overland Park Regional.
Craig Holman, a lobbyist with the national government watchdog group Public Citizen, said that could pose a conflict of interest if Colyer had any hand in promoting HCA Midwest’s tax incentive package.
“If he recused himself from the deal because of his conflict, that would be fine,” Holman said. “But if Colyer was behind this tax deal, the business arrangement could well serve to personally benefit the governor and, at the same time, may have been a misappropriation of public funds if the tax deal could have offered the people of Kansas a better deal with some other health care company.”
Colyer was lieutenant governor until Brownback was confirmed for a position in President Donald Trump’s administration Jan. 24. He said he didn’t know about HCA Midwest’s tax incentive deal before that.
“That was something that was done under Gov. Brownback and (former interim Commerce) Secretary Nick Jordan,” Colyer said. “I was unaware of it. Learned about it when I became governor. I have no benefit from it.”
Colyer said he favors government transparency and will consult with legislators about making tax incentive deals more public in the future.
HCA Midwest Health president M.L. Lagarde said the headquarters will relocate this summer when the lease expires on its current location near I-435 and Holmes Road.
“We are relocating our employees, roughly four miles away, to better meet our long-term, dynamic office needs,” Lagarde said. The HCA Midwest Health headquarters has close to 70 employees.
Company spokeswoman Christine Hamele said this new building will be tailored to the employees’ office requirements.
“It’s an opportunity for us to design something specific for our needs,” she said.
Overland Park Regional was the chain’s most profitable hospital in 2016, clearing about $63 million in income according to data collected by the Missouri Hospital Association. Research Medical Center was the least profitable, absorbing about $5.7 million in losses.
The company also owns freestanding emergency rooms, outpatient surgical centers and urgent care clinics throughout the region.
Overland Park mayor Carl Gerlach also released a celebratory statement.
“Overland Park is a nationally ranked city because of many community attributes, one of those being availability of quality medical services,” Gerlach said. “HCA Midwest Health Division is further demonstrating its commitment to supporting outstanding services in Overland Park and beyond.”
The city of Overland Park did not provide any local incentives for the project, according to Beth Johnson, senior vice president for economic development with the Overland Park Chamber of Commerce.
Johnson said the development is a great addition to the health care assets in the city.
Bryan Lowry contributed to this report.